(Alliance News) - Dunelm Group PLC on Wednesday expects a return to bottom-line growth in its new financial year, after inflationary pressure kept a lid on the home furnishings retailer's annual profit.

Dunelm said that in the financial year ended July 1, pretax profit declined 9.4% to GBP192.7 million from GBP212.8 million. Operating costs were 5.1% higher at GBP622.1 million.

The FTSE 250 listing's annual revenue, however, climbed 3.6% to GBP1.64 billion from GBP1.58 billion.

The previous financial year had an extra week, Dunelm noted. On a 52-week basis, revenue was 5.5% higher, while pretax profit was down 7.8%.

"In a period of extensive economic uncertainty, we have maintained our focus on enhancing our customer proposition, expanding our offer whilst staying fully committed to value and making every pound count Chief Executive Officer Nick Wilkinson said. "This has clearly resonated well with our customers, enabling us to continue growing both sales and market share. As ever, our amazing colleagues have been at the heart of this performance and I thank them all for their knowledge, personality, commitment and enthusiasm.

"As we manage the ongoing challenges, it is crucial that we do not lose sight of our longer-term ambitions. We are committed to raising the bar on value and joy for our customers and continuing to invest where we see good returns, so that we can seize the various opportunities ahead."

Dunelm said it has "never been more confident" in its short, medium and long-term opportunities.

The company said that although consumer behaviour "remains unpredictable" it expects volumes to drive sales and pretax profit growth in the new financial year. It said it is pleased with early trading so far in the new year.

Dunelm lifted its final dividend by 3.8% to 27 pence per share from 26p. Its total ordinary dividend for the year was 5.0% higher at 42p from 40p. It had also paid a special dividend of 40p for the financial year, up 8.1% from 37p the year prior.

Dunelm shares fell 1.5% to 1,067.00 pence each in London on Wednesday morning.

By Eric Cunha, Alliance News news editor

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